Christopher Sweeney is 30, willing to get his hands dirty and formally trained in trade work.

The Escondido electrician epitomizes what today’s homebuilders want in a subcontractor. He is young, has field experience and prefers being on job sites over cubicle life.

Problem is, workers like Sweeney are hard to find. The housing bust spurred a mass exodus of qualified construction staff who are likely not returning. And few Sweeneys have been minted since the downturn.

“We weren’t bringing in new blood until ’12 and ’13. Really, we lost a decade of new workers,” said Jeff Platt, president of Schilling Paradise Corporation, an El Cajon company that does engineering and electrical work.

That and other market constraints — from soaring costs for raw materials to a developers’ fee that shot up 64 percent — have prevented homebuilders from producing enough homes to satisfy pent-up demand, they say.

Once burned, builders are bringing new properties to life with caution.

“We have to ramp up very methodically,” said Jon Robertson, the Southern California division manager for Newport Beach-based William Lyon Homes, which builds in San Diego County. “Clearly there’s land-supply constraints and labor constraints, so we haven’t accelerated (at a rate) we believe is acceptable.”

Uncertainty in the market also has flooded into the world of contractors, the companies that send in workers to erect wooden framing, pour concrete and install electrical systems.

Although demand for skilled laborers is up, contractors are just as cautious as the builders. Companies pared down to their ace staff during the recession and are hesitant to grow out of fear they could get socked by another economic calamity.

Countywide, the number of private residential-construction jobs has been more than halved since the peak of the housing market in 2005, according to job figures from the state.

As others fled California, Sweeney hung on and enrolled in an electrical-training program that saw such a low student count he waited 10 months before the school could fill one class.

“I made it to the last group of guys,” said Sweeney, who weathered a layoff and graduated in May from Associated Builders & Contractors, a Poway-based trade school. He now works full time at Rowan Electric in Carlsbad.

Contractors who do manage to snag quality workers like Sweeney are struggling to retain them.

In certain trades, some companies have been trying to lure competitors’ workers by offering cash. Cash is attractive because workers tend not to pay the required taxes on that income, so they’re bagging more money, said Paul Barnes, president of private homebuilder Shea Homes San Diego.

Contractors in some cases have asked Shea Homes to pony up to $3 more an hour per worker so they can keep more from going to cash-only contractors.

Aging workforce

Longer-term challenges with construction labor also haunt builders and developers. Over the years, an increasing number of younger adults have opted for desk jobs over manual labor, causing the average age of trade workers to rise.

More than half of all construction workers in California are 45 and over, show numbers from EMSI, an employment-data tracker owned by CareerBuilder. About one in five of those workers are 55 and over.

“It’s a hard industry for young people to get fired up about,” said David Brooks, owner of Four Corners Concrete in Escondido. “In college, I worked on a grading crew, did rebar installation, worked in the yard.”

Now, that kind of experience is rare.

Sweeney, the 30-year-old electrician, is one of the exceptions. Unfortunately for homebuilders, his skills are mainly being reaped by the commercial real estate sector, which Sweeney prefers because of better pay.

A nonresidential construction worker in San Diego County working in the private sector makes an average of $1,369 a week, or 44 percent more than a worker doing residential work, according to 2012 numbers compiled by the state.

There’s also more volume on the commercial side, which means more work.

“There’s no residential home that’s 10 stories,” Sweeney said.

Costs rising

Construction worker Alberto Ponce does the finish work fresh concrete stucco on a new residential construction project by McMillin Homes in east Chula Vista. The price of commodities including cement and lumber are up.
— Nelvin C. Cepeda

Construction worker Alberto Ponce does the finish work fresh concrete stucco on a new residential construction project by McMillin Homes in east Chula Vista. The price of commodities including cement and lumber are up.
— Nelvin C. Cepeda

The raw materials that construction workers handle also are included on builders’ lists of mounting concerns. Lack of production during the recession, fewer providers and increased demand have caused prices of key commodities to rise sharply.

Take lumber. The commodity, which makes up nearly 10 percent of builders’ total direct costs, hit its all-time peak of $817 per thousand board feet in late March. Prices have since eased but are still about 13 percent higher than a year ago, according to analysis from Reliable Wholesale Lumber, a Southern California forest-product distributor based in Huntington Beach. The company’s figures are based on market pricing for a typical two-story new home in California.

Why is the price of lumber so volatile?

During the housing boom, mills ran around the clock to produce lumber. They whittled down to one eight-hour shift as the economy tanked, significantly cutting down production.

Despite increased home production, timber-holding companies and lumber manufacturers have kept production levels status quo out of caution, said Will Higman, chief operating officer at Reliable Wholesale Lumber.

What’s more, lumber prices are now determined by fewer people. More companies in the past were in the business of both timber holding and lumber manufacturing. As the recession deepened, more major companies shed one of those functions, often selling their shares to mega-competitors.

“It’s fewer hands and bigger companies,” Higman said.

Uptick in fees

Increased fees also have helped bog down for-sale home building. The biggest one to hit builders is San Diego city’s inclusionary-housing fee, which residential developers must pay if they don’t include affordable housing in their projects.

As of July, the fee rate for developments of 10 or more units soared 64 percent to $8.20 a square foot. A builder would pay roughly $6,400 more on a 2,000-square-foot home post-hike — a cost likely to be passed on to consumers.

Money from that fee pays for affordable-housing projects, which have been largely in limbo ever since California eliminated their major funding source of redevelopment agencies. Their disappearance has sent municipalities scrambling to find ways to raise more money to fund workforce housing.

Those in the homebuilding industry feel blindsided by the fee hike, which is adjusted every year, said Marco Sessa, senior vice president of Sudberry Properties, the developer of Mission Valley’s Civita mixed-use project.

The charge is crunched every year using a formula based on the median sales price of all residential sales in the city, which has skyrocketed in the past year. June’s median price for all homes sold in San Diego County hit $416,500, a 24 percent increase from a year ago and the 10th straight month of double-digit annual percentage increases.

“Developers have the option of not paying the fee if they avail themselves of exemptions provided under the ordinance,” said Maria Velasquez, spokeswoman for the San Diego Housing Commission, which adjusts the inclusionary-housing fee.

Sessa and others in residential development say regulators are too focused on the positive headlines and are ignoring the fact that costs, from land to labor, have risen.

Permit process slow

Residential permits are generally up throughout the county, but municipalities are failing to retool their review processes “to keep up with more vibrant demand,” said Barnes, of Shea Homes.

Paperwork that would usually take two weeks to process may now take as long as six weeks due to low staffing and lack of institutional knowledge, some homebuilders say.

“Yes, we have a backlog in some of our reviewing disciplines due to an increase in workload and current staffing levels,” said city of San Diego spokeswoman Lynda Pfeifer in an email.

The city has begun to beef up staffing in the planning and permitting departments, roughly two years after the city cut its staff by 7 percent and abolished its planning division.

On the county level, homebuilding permits have shot up 32 percent year-over-year. But officials don’t plan on hiring more people, said Clay Westling, chief of the planning and development services department.

The county also saw a drastic reduction in its permitting and planning staff during the recession. They employed 91 in 2006-2007 and are now down to 40.

Instead of hiring, the county’s solution is to implement an online system that helps process permit requests, Westling said.

How builders respond

Increases in fees and operation costs for homebuilders and developers have translated into higher costs and continued slim pickings for homebuyers.

It’s now normal for builders to mark up prices up to 20 percent after every successful phase to meet their bottom lines. The number of homes on the market has picked up over the past few months but remains lower than normal, keeping it a sellers’ market.

“As an industry, we’re really not too keen on seeing small volume and prices spiking too quickly, or we’ll have another self-fulfilling prophecy,” said Borre Winckel, executive director of the Building Industry Association of San Diego.

Fast-rising prices have meant more consumers being priced out of the for-sale market and pushed into the multifamily sector, which is doubly outpacing single-family housing production.

To adapt to market changes, homebuilders already are shifting strategies.

As land becomes more scarce and costs have gone up, some are developing more dense projects.

Private builder William Lyon Homes recently released the first phase of what will be a 102-unit condo project in Escondido called Contempo. The company is poised to finish a similar-sized project in Kearny Mesa in the beginning of 2014.

Shea Homes has found success with their townhome project Origen, in the Civita master-planned project. To date, Shea has sold 142 units of Origen’s skyLoft and socialGarden communities, with every mini-phase going quickly. When completed Origen will have nearly 200 units.